Car rental market recovers as companies seek to cut costs
New vehicle rental business registrations in the first six months of 2022 were up 40.7% year-on-year according to the Business Development Department.
Vehicle rental activity picked up in the first half of this year, as private companies and public administrations opted to rent vehicles, instead of making purchases or using hire purchase, to reduce their costs.
According to Deputy Trade Minister Sinit Lertkrai, the booming delivery services have also spurred growth in the vehicle rental business as self-employed people rent cars and motorbikes rather than using rental vehicles- sale to deliver goods, food and passengers.
“Thanks to leasing, users do not have to pay maintenance and repair costs as well as annual car inspection costs. This helps a lot in reducing user expenses, especially during the current economic difficulties. “, Mr. Sinit said.
According to the latest report from the Department of Business Development, new vehicle rental business registrations increased by 40.7% year-on-year to 76 in the first six months of 2022, with new capital of 132, 9 million baht.
Mr Sinit said the figures reflected growing investor confidence in the country’s economic recovery, boosted by government support policies and economic stimulus measures.
According to Sinit, electric vehicle (EV) rental services have also increased due to rising energy prices and growing environmental concerns.
The growth in activity is in line with the number of charging stations, which has increased sharply this year.
According to Sharge Management Co, a provider of battery vehicle charging systems, around 6,000 charging outlets currently serve around 40,000 electric vehicles.
If the government can increase the number of electric vehicles in the country to 300,000, the number of charging points must increase to 100,000 nationwide, according to a prediction from Sharge Management.
As of June 30, 2022, 2,045 vehicle rental service providers were still in operation, mainly in the country’s main tourist destinations such as Bangkok, Chon Buri, Phuket, Chiang Mai, Surat Thani and Samut Prakan.
The vehicle rental business generates an average of 46.5 billion baht in revenue per year. Nevertheless, the company recorded a 9% drop in revenue in 2021, to 39.9 billion baht, from 44.1 billion baht in 2020 and 55.3 billion baht in 2019. This was mainly attributed to the impact of the Covid-19 pandemic.